Bitcoin surged past $116,000 on Friday, capturing a burst of momentum that erased over $1 billion in leveraged positions—primarily shorts—representing the most significant liquidation event since January. As BTC bulls celebrated new highs, market watchers took note: this rally was not just another price milestone, but a clearing of leverage that could reshuffle sentiment and positions for weeks to come.
Bitcoin began its ascent above $113,800 midweek and maintained its upward drive. Late Thursday, BTC broke definitively beyond $116,000—fuelled largely by inflows into spot BTC ETFs and macroeconomic stability carried over from recent inflation and Fed commentary. But it was the resulting cascade of liquidations that defined the breakout.
Data from CoinGlass shows that more than $1 billion in leveraged bets were liquidated within 24 hours, driven almost entirely by short-position traders caught off-guard as the rally accelerated. In fact, $950 million of that total came from shorts alone—making it the largest shorts decimation seen in 2025, affecting 237,000 positions across crypto markets ([turn0search4]). One of the most striking examples was a $521 million short position on Hyperliquid that traders attempted to target for liquidation, illustrating the sheer scale of leveraged exposure in play.
When Bitcoin breaks key resistance—especially above levels like $116,000—it triggers forced liquidations. Shorts are automatically closed as prices rise, prompting frantic buybacks that accelerate the rally. Friday’s event felt like a classic squeeze scenario, where the inability for traders to exit their bearish bets compounded upward momentum.
This liquidation wave not only amplified BTC’s move but also reshaped the derivatives backdrop. As long-side traders absorbed short-covers, funding rates flipped positive, marking a shift in market control from shorts to bulls. It’s a transition echoing the flip seen at the $101,000 mark in April, when shorts were similarly swept out.
Friday’s price action was more than just a leveraged purge—it was confirmation of structural demand. Institutions remain actively funneling capital into Bitcoin. According to June data, U.S. spot BTC ETFs welcomed over $50 billion in net inflows, and corporate treasury buys pushed Q2’s total by 159,000 BTC (~$17 billion).
This supports the idea that Friday’s breakout reflected strong conviction, not speculative bubble behavior. With ETFs anchoring demand, BTC’s rise touched new highs even as broader equity markets remained mixed.
Liquidations at this scale inevitably clear low-conviction capital from the path. With $1 billion+ erased, markets now look structurally cleaner—but the question remains: what happens next?
Historically, such squeezes can trigger brief exhaustion. Prices may consolidate as leveraged players regroup and long liquidity dries up. However, when supply is scarce and underlying demand remains strong, the reset phase often paves the way for further upside.
Some analysts suggest that a brief cooldown—perhaps a pullback toward $112,000–$114,000—before continuation is possible. Others believe the structural support is strong, given continued ETF inflows and on-chain whale activity
Several key indicators will clarify whether the rally has legs:
- Funding rates: Continued positive funding indicates bullish structure, while sharp spikes may warn of excess.
- New liquidation clusters: If short liquidations reappear above or around $118,000–$120,000, it suggests momentum remains intact.
- ETF flows: Sustained institutional capital commitments, particularly from BlackRock’s IBIT or Fidelity’s FBTC, will underpin long-term strength.
- Macroeconomic headlines: With significant U.S. data and global risk events on deck, Bitcoin could test support under broader market shifts.
The move past $116,000 and over $1 billion in short liquidations represent more than a price milestone—it demarcates a market repositioning. Bitcoin is emerging from this squeeze with renewed technical momentum and cleaner market structure, moving beyond speculative excess.
In this new phase, volatility may moderate—and institutional foundations may deepen. Ultimately, whether Bitcoin targets its next milestone—be it $120,000 or the longer-term forecast of $150,000+—depends on whether post-squeeze consolidation holds or morphs into sustained breakout.
Traders and long-term holders alike should watch July’s macro events, ETF flow data, and derivatives positioning to determine whether this is just a powerful reset—or the beginning of the next major leg higher.